Despite delivery times improving significantly in the last few years, warehousing and fulfilment costs remain high, particularly for small orders and deliveries to rural or mountainous areas.
Rising operational pressure on both platforms and online sellers is now a defining trait of Vietnam’s e-commerce growth, with logistics being a big bottleneck.
Despite delivery times improving notably, warehousing and fulfilment costs are high.
That is why many platforms are developing their own logistics systems.
Dependence on platform algorithms and policies has reduced small merchants’ independence.
That is one of the reasons why many e-commerce platforms are focussing on developing their own logistics systems to gain better control over supply chains and optimise costs.
Increasing platform-related expenses are also raising pressure on online merchants. Sellers now have to now not only pay platform commissions, but also spend more on advertising, product visibility, promotional campaigns, livestream activities and engagement-boosting tools.
Several small merchants say operating costs are now significantly higher than earlier, while dependence on platform algorithms and policies has reduced their ability to operate independently.
The pressure is particularly severe for small retailers. Without sufficient budgets for advertising or participation in major platform campaigns, their ability to reach customers declines sharply. This has widened the gap between professional branded sellers and small household businesses, according to a report in a domestic media outlet.
The country’s e-commerce market reached $31 billion last year, more than double the level recorded in 2020, according to SHS Research.
The sector now accounts for roughly 10 per cent of the country’s total retail sales and consumer service revenue, while contributing about two-thirds of the national digital economy.
Fibre2Fashion News Desk (DS)
